Reducing size of gadgets
I'm having trouble reducing the size of gadgets too. There doesn't seem to be a 'reduce gadgets' option in Windows 7 - at least, not in the RC.
In my case they are too large because I've increased the system DPI (I've got a hi-res WUXGA screen on a 15.4" laptop and increase DPI by 154%) . This gives a deliciously sharp screen at normal font sizes.